The European Union’s Carbon Border Adjustment Mechanism (CBAM) is changing the economics of electricity trading across Southeast Europe. It is creating a wider difference between wholesale power values and the carbon-adjusted cost of electricity imported from the Western Balkans.
The effect is described as potentially more immediate for electricity than for steel and aluminium. While those sectors benefit from transitional adjustments tied to the gradual withdrawal of free EU carbon allowances, electricity imports do not receive equivalent free-allocation relief. As a result, carbon-intensive power exports face additional costs from the beginning of 2026.
The latest published CBAM certificate price reached €82.32 per tonne of CO₂ for the third quarter. This compares with €75.28 in the preceding quarter, raising the indicative carbon cost for exports from countries with high default emissions factors.
Using existing national default factors, the third-quarter price implies gross CBAM exposure of about €85.70/MWh for Serbia, €80.59/MWh for Montenegro, and €94.50/MWh for Bosnia and Herzegovina. North Macedonia faces an indicative €73.01/MWh, while Albania’s zero default factor produces no carbon charge under the default calculation.
The amounts are illustrative based on the third-quarter certificate price and are not final charges for October deliveries. The fourth-quarter certificate price will be set in January 2027, and actual liabilities may reflect eligible deductions for carbon prices paid in the country of origin.
Carbon-adjusted costs vs day-ahead wholesale spreads
On October 9, Serbia’s SEEPEX day-ahead electricity price rose to €239.96/MWh. The level was up almost 34% from the previous session, while Hungary’s HUPX reached €269.43/MWh.
The difference between those daily averages was €29.47/MWh, which remained substantially below Serbia’s indicative default-based carbon exposure. The source data indicates that a trader importing Serbian electricity into Hungary would struggle to cover the carbon cost using that daily average spread alone.
The same day, Montenegro’s BELEN price reached €223.39/MWh. Italian wholesale prices in several bidding zones were around €230–235/MWh, producing a similarly narrow indicative differential for electricity delivered through the Montenegro–Italy interconnection.
The figures also note that daily average spreads are not executable trading margins. Hourly variations can create individual opportunities, but the structural effect described is that a low wholesale price outside the EU does not guarantee competitive pricing inside the EU once carbon costs are applied.
Regional flow changes and two commercial segments
The Energy Community Secretariat has identified changes in regional electricity flows linked to evolving market conditions. Gross commercial exchange between Western Balkan markets and neighbouring EU markets declined by about 19% year on year in the first half of 2026.
The reported decline occurred alongside other drivers including hydrological conditions, generation availability and changing import requirements. The source also describes a growing separation between domestic and regional trading within the market.
Under this split, domestic and regional trading is characterised as activity where EU CBAM import charges do not directly apply. Exports into EU markets are described as a separate segment where carbon-adjusted costs influence whether scheduled transactions remain profitable.
Evidence requirements for using actual emissions in CBAM
For Serbian utility EPS, Montenegrin EPCG and power producers across Bosnia and Herzegovina, the new environment places emphasis on generation technology, electricity origin and demonstrating actual emissions. The distinction is presented as especially important for renewable energy projects exported into EU markets.
A Serbian wind farm producing low-carbon electricity is not automatically said to qualify for favourable CBAM treatment when its output is exported into Hungary. The source states that unless an EU declarant meets conditions for using actual embedded emissions, exported electricity can remain subject to Serbia’s national default value.
The rules cited require a qualifying physical power purchase agreement, evidence of the generating installation, compliant cross-border capacity nominations and hourly matching between generation and nominated deliveries. Additional evidence regarding grid connection or absence of congestion is also required, with an accredited verifier assessing supporting information.
The source further states that guarantees of origin cannot replace this physical and contractual evidence. For project developers and lenders, it says this creates uncertainty over additional value from selling power directly into the EU.
Implications for renewables financing and industrial CBAM liabilities
The source links these requirements to impacts on projected revenues, long-term power purchase agreements, financing assumptions and investment cases for new renewable capacity. It also notes that CBAM effects extend to industrial manufacturers while regulatory treatment differs by sector.
Under the current CBAM regime described, indirect emissions from purchased electricity are included in CBAM liability for cement and fertilisers. For iron, steel and aluminium, liabilities are stated to focus on direct embedded emissions rather than indirect emissions from purchased power.
This means sourcing renewable electricity does not automatically reduce certificate obligations for a Serbian steel or aluminium exporter under CBAM as described. The source adds that renewable supply can still lower operating costs, improve corporate emissions performance and strengthen supply relationships with European manufacturers seeking lower-carbon materials.
For cement and fertiliser producers, qualifying lower-emission electricity can influence carbon intensity used in CBAM calculations subject to applicable methodology and verification requirements. The European Commission has proposed changes to electricity CBAM methodology that could reduce disadvantages faced by renewable generators where default emission factors reflect carbon-intensive thermal production.
The reforms are described as not yet fully adopted at the time of reporting. For banks financing renewable projects, electricity-intensive manufacturers or cross-border trading businesses, CBAM is presented as adding revenue opportunities alongside margin and regulatory risk through compliance requirements.
CBAM timing for 2026 imports and ongoing market differentiation
The first CBAM certificates covering 2026 electricity imports will be purchased from February 2027. Annual declarations and certificate surrender are due by September 30, 2027.
The source describes an ongoing challenge in Southeast Europe: electricity markets remain physically interconnected while commercial economics become differentiated by carbon treatment under CBAM rules. It states that a megawatt-hour produced in Serbia or Montenegro can still reach a European buyer through interconnected transmission networks.
Whether such electricity can be sold profitably is described as increasingly dependent on its carbon classification and transaction evidence rather than solely on differences between wholesale prices across borders.
